Personal Financial Statements Can Show You the Way To Improve Your Finances—Today...

There are many different types of financial statements available that can help
you get a better picture of where you stand financially.

A
Personal Cash Flow Statement (Budget) is a statement that reflects your income
and expenses on a monthly basis.

By properly utilizing a personal cash flow statement prior to
purchasing and/or selling your home you can better determine if home ownership
is appropriate for you at this time, or whether staying where you are and
saving—and/or pursuing other options are your best choice.

A personal cash flow statement helps determine
how liquid you are and is a good barometer in determining your ability to meet
your future financial obligations.

In addition—by doing a pre-purchase and a
post-purchase cash flow statement (cash flow income and expenses analysis
before and after you have purchased your home) you can get a realistic picture
of how you can enjoy your home after purchase.

Furthermore, you will know the cash that you
will have left over on a monthly basis(discretionary income)after your housing expenses and all
of your other debt has been analyzed.

Remember, it is best that you do both the pre-purchase and post-purchase cash flow analysis "prior to" purchasing and/or
selling your home.

Even if you don't exactly know your future housing and other
expenses—it is best to use projected realistic expenses to ensure that you have
no future surprises.

If the
financial picture that you get in the pre-purchase and post-purchase cash flow
analysis is not to your liking you would then be in position to not proceed with the
purchase and purchase at a later date—if you desire—once you are in a better
financial position.

The balance sheet statement is a particular snapshot of your
finances at a particular point intime (actually the date of the statement).
Many third parties (Banks, Lenders etc.) utilized the personal balance sheet in the past
when deciding to grant certain credit.

Today it would be used in conjunction with your
personal income statement and personal cash flow statement if you were to seek a loan of
a certain type for certain credit.

Your Net Worth is the amount of wealth or equity
you have in owned assets.

Your net worth is actually calculated by taking
the difference between your total assets and your total liabilities.

Regardless of your assets and your liabilities
the statement must always balance.

In simple
form Assets minus Liabilities = Net Worth.

A personal balance sheet will give you a good idea of
your financial condition if you are organized and want to totally take control
of your finances.

A Personal Balance Sheet Statement will show you whether you hit your targeted goals and also
show you if you fell short.

By preparing the balance sheet in advance you
can use it for budgeting and/or projections and when used in conjunction with
your cash flow statement and income statement it can give you a much clearer
picture of your financial future.

By being
able to see your future more clearly you will be in a much better position than
you were to make decisions that are good for you and your family.

Also, by knowing your financial position after your home purchase (by doing
this analysis on the front end) you will know your financial situation after
your projected home purchase and/or sale.

You will
know what your discretionary (money left after all of your monthly expenses
have been paid) income is on a monthly and annual basis and know prior to purchasing or selling if you can
continue doing the things that you like to do—or do additional things that you are
not doing at this time!

In short, financial statements can help you plan
better when you have adequate financial information in easy to understand
statements.

The financial statements—however—are only as
good as the accuracy of the data inputted.

Therefore, you want to be sure that your income
and expenses are as accurate as possible and your assets and liabilities are as
accurate as possible.

The real
value of the above financial statements will be seen years down the road in the
improved living conditions for you and your family!

He is the creator of TheWealthIncreaser.com where he regularly blogs about helping
consumers improve their credit, finance and real estate pursuits in an
intelligent, consistent and proactive manner.

He’s always looking for
ways to make intelligent
finance improvement happen for those who “sincerely desire”
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and he consistently writes in a style that is designed to provide
consumers the ability to take control of their lives and achieve great
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